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Wisconsin insurance company makes coverage error

The Associated Press
5:34 p.m. CDT July 7, 2014

Nearly 300 people who applied for stand-alone dental coverage from Anthem Blue Cross Blue Shield Wisconsin through the federal health care exchange thought they had policies but didn’t have them activated.(Photo: Getty Images)

MADISON — Nearly 300 people who applied for stand-alone dental coverage from Anthem Blue Cross Blue Shield Wisconsin through the federal health care exchange thought they had policies but didn't have them activated, according to enforcement records from the state's Office of Commissioner of Insurance.

The Wisconsin State Journal reported Monday (http://tiny.cc/kismix ) that the documents show the Waukesha-based insurance company signed a stipulation and order April 24 agreeing to stop offering inadequate insurance. The records also show the insurance company agreed to activate appropriate coverage and reprocess any claims that were denied due to the company's system error, the newspaper reported.

It is the first and so far only enforcement action taken by state insurance regulators in connection with the federal health marketplace program for the uninsured.

Though this is the only enforcement action against an insurer taken by the OCI in connection with the exchange, the office in January warned consumers that in some cases the transfer of enrollment information from the federal government to the insurers was "delayed, or not occurring at all."

The letter sent to those affected said the error was geographical and involved mixing dental insurance — which Blue Cross Blue Shield offers in all counties — with medical, which it does not. As a result, those involved thought they were covered but were notified April 16 they were not.

Blue Cross Blue Shield also agreed to issue premium notices retroactively and develop a way to monitor accuracy of the system.

Blue Cross Blue Shield is one of 13 insurance companies in Wisconsin participating in the marketplace exchange. It did not discover until March 13 that its enrollment and billing system was not updated to reflect statewide coverage availability, according to the stipulation.

"Our dental network was incorrectly entered into our computer system to mirror the geography of the individual medical network, when it should have been displaying as a statewide network," said Scott Larrivee, Blue Cross Blue Shield spokesman.